Beginner3 min readDividends and Corporate Actions · 2/9
The Entitlement Date: Who Gets the Dividend?
Two people held the same stock in the same week; one got the dividend and the other did not. It was not luck. It was when each bought or sold relative to the last session with the right.
What you will learn
Understand the entitlement date and how it relates to the last session with the right.
Work out who gets the dividend in four different cases.
Know what to do if a dividend comes in lower than expected.
The lesson as a short video · 20 seconds · Watch on YouTubeIn this lesson
Misr for Central Clearing pays dividends to whoever owns the share on the entitlement date. So the question is not who holds the share on payment day, but who owned it on that date. Since you trade in sessions, the dividend notice turns this into one clear line: the right passes to buyers up to the end of a named session.
7 SepAnnouncement
18 SepLast session with the rightBuy by its close = the dividend is yours
21 SepFirst session without the rightBuy from here = not this dividend
5 OctPayment
Invented dates for illustration. The dividing line is the close of the 18 September session.
Four cases on the same dates
An invented company, Delta Packaging, announces a dividend of one pound per share, with 18 September as the last session with the right. Look at these four:
Bought on the 18thBought 300 shares in the last session with the right. He is paid on all 300: EGP 300 before deductions.
Bought on the 21stShe bought in the first session without the right. She gets nothing from this dividend, even if she still holds the share on payment day.
Sold on the 18thHe sold in the last session with the right. The right went to his buyer, so he gets nothing.
Sold on the 21stShe owned the share through the close on the 18th and sold afterwards. The dividend is hers, even though she no longer holds the share.
Paid less than you expected?
If the dividend was paid on fewer shares than you hold, you most likely bought some after the last session with the right or sold some before it. MCDR advises asking for a statement on that security at the entitlement date to see exactly what your balance was.
Watch outThe entitlement date itself is not necessarily the last day you can buy. Rely on the notice's line about the end of which session, not on a date you work out yourself.
Try it on a real dividend
Open corporate actions, pick an upcoming dividend and find its last session with the right. Then ask yourself: if I bought today, would the dividend be mine?